Niklas Nikolajsen, the founder of Swiss crypto broker Bitcoin Suisse, predicts that Bitcoin (BTC) will move to Proof-of-Stake (PoS) once the Ethereum (ETH) network has proved the algorithm'due south success.

Bitcoin's current Proof-of-Work (PoW) consensus algorithm — the pioneering concept which in fact pre-existed Bitcoin, but has since come to be indissociable from the cryptocurrency — "will probably change in the future," Nikolajsen argued.

In outtakes from an interview conducted for a High german Telly documentary — recorded dorsum in October 2022, merely uploaded on April 6 — Nikolajsen said:

"[Bitcoin'south move to Proof-of-Stake] is not planned, merely the 2d-largest cryptocurrency, Ether, will motility to a Proof-of-Stake concept that demands vastly less electricity, already in a few months. I'chiliad sure, once the applied science is proven, that Bitcoin will adapt to it as well."

"Once information technology's proven that Proof-of-Stake works well, it'southward a superior organisation to Proof-of-Work," he said.

What'southward at stake?

In blockchains that use a PoS organization, nodes in the network appoint in validating blocks, rather than mining them, as in PoW.  For PoS, a deterministic algorithm selects block validators based on the number of tokens a given node has staked in their wallet — i.eastward. deposited as collateral in order to compete to add the next block to the chain.

Nikolajsen's prediction that Bitcoin will eventually migrate to a PoS system was made in the context of a discussion of the notoriously high levels of electricity needed to sustain mining on the current network.

He dismissed claims that mining Bitcoin consumes levels of electricity comparable to small-scale nations and as well emphasized that mining's free energy-intensity is less of an issue than where that energy is produced and how sustainably it is generated.

Moreover, the energy consumption of producing gilded — Bitcoin's proverbial predecessor — must be equally best-selling, Nikolajsen states, every bit does that in the existing banking system and tech industry:

"Which metropolis in the world doesn't have 100-story-high cyberbanking towers, glowing in a one thousand thousand different colors all night, and their financial systems, their computers, server rooms. How much energy does Facebook consume? They have 21 huge data centers worldwide, I'd say probably more than than Bitcoin. The banking system for sure consumes a lot more energy."

Algorithms go head-to-head

The mutual perception that high energy consumption is an "Achilles Heel" for Bitcoin has been critiqued past some proponents of clean energy, who, like Nikolajsen, identify an emphasis on the sources of ability, rather than levels of consumption.

Beyond the energy problem, the PoS vs. PoW debate engages questions of economical fairness, barriers to entry, network security and decentralization.